Retail industry hit hard by bleak trading over Christmas

Tesco is expected to report a 2% drop in sales over the Christmas trading period covering six weeks to 7 January. Photograph Toby Melville/Reuters

The dire state of the high street will be drawn into focus this week as two of the nation's best known brands will join a growing list of retail casualties.

Blacks Leisure, the outdoor retailer, will be sold in a prepack administration to rival JD Sports for about £20m and most of the lingerie chain La Senza will enter administration after Middle Eastern retailer Alshaya picks up about 60 of the most profitable stores.

It comes as new figures show 183 retailers went into administration last year – a 10% rise on 2010 – and many more, including Hawkin's Bazaar, Past Times and Barratts Shoes, remain on the critical list.

The roll call of high street failures will continue to grow this year, and many of the biggest names in retailing are preparing to announce big drops in critically-important Christmas trading. Argos, HMV and Game Group are expected to report a 10% drop in sales against last year.

Even Tesco and Marks & Spencer are expected to this week reveal they had a turkey of a Christmas. City experts predict Tesco, Britain's biggest supermarket chain, will deliver its worst British Christmas sales performance in decades.

Tesco's house brokers, JP Morgan Cazenove and Deutsche Bank, are forecasting a 1.5-2% decline in sales from core British stores in the six weeks to 7 January.

Marks & Spencer, the bellwether of the high street with more than 21 million customers, is expected to post a 1.5% decline in clothing and homeware sales in the 13 weeks to 31 December.

Stephen Robertson, director general of the British Retail Consortium (BRC), said the number of retail failures was "alarming".

"2011 was a tough year with virtually no real terms growth for retailers. In such a competitive sector there will always be businesses that do well while others struggle but seeing such a high number of failures in the final quarter of the year is particularly alarming," he said. "The next few months are bound to be quieter as consumers rein in spending after Christmas."

Robertson said the collapse of retailers "leaves gaps on our high streets and can result in thousands of job losses". Research by Deloitte shows 183 retailers in England and Wales collapsed into administration last year compared to 165 in 2010.

Theo Paphitis, the Dragon's Den star and former owner of La Senza, tweeted over the weekend that Lion Capital, the lingerie group's private equity owner, had agreed to sell about 60 stores to Alshaya.

"The bad news re @lasenza is that the other 80 shops will be closed down or put in the hands of Admin KPMG with resulting job losses..Sad !," Paphitis added.

A spokesman for Lion said: "We can confirm that Alshaya, a leading international retail franchise operator, is in advanced discussions with La Senza regarding a potential acquisition of part of the UK La Senza business. Further announcements regarding this transaction and plans for La Senza's stores and employees will be made in due course."

Meanwhile, supermarket group Morrisons is reportedly thinking about buying up some failed Best Buy megastores to grow its Kiddicare brand.

The Bradford-based grocer is understood to be in advanced talks with Carphone Warehouse about the 11 'big box' sites, which are in the process of closing after a failed joint venture with US electricals group Best Buy, according to The Sunday Telegraph.